Quaker moves further into food service

CHICAGO — Since PepsiCo, Inc. purchased The Quaker Oats Co. in 2000 for approximately $13.4 billion, the company has taken a number of steps to spur global Quaker growth, ranging from fruit bars in Mexico to the March introduction of oatmeal cookies in the United States.

But one area that seems to have gained traction in recent months is food service, where Quaker’s heritage oatmeal is making its mark.

Last fall, McDonald’s Corp., Oak Brook, Ill., began using Quaker oats in its oatmeal offering, while Miami-based Burger King Corp. introduced 100% whole grain Quaker oatmeal. In both cases the fast-food chains offer oatmeal toppings such as cranberries, raisins, cherries and blueberries. The moves also were seen as a way to offer more better-for-you products for breakfast.

McDonald’s has commented in quarterly reports about the success it has seen from the addition of oatmeal, and has even expanded the varieties it offers. Burger King, meanwhile, has not mentioned publicly how it is faring.

More recently, Dunkin’ Donuts, Canton, Mass., has added to its DDSMART menu with the launch of Quaker oatmeal. Dunkin’ Donuts restaurants will serve Quaker oatmeal in two varieties: original and brown sugar, both of which are served with dried fruit.

The original variety has 270 calories, while the brown sugar variety has 300 calories.

Quaker oatmeal is available at participating Dunkin’ Donuts restaurants for a suggested retail price of $1.99, and is expected to be rolled out throughout the United States by November.

“Dunkin’ Donuts is committed to meeting the needs of our guests by providing better-for-you choices for eating on-the-go,” said John Costello, chief global marketing and innovation officer at Dunkin’ Brands. “Expanding our DDSMART menu with the introduction of oatmeal reinforces that commitment to offering a wide array of options that fit customers’ lifestyles and dietary preferences, and keep people
running all throughout the day.”

Just a few days after Quaker’s partnership with Dunkin’ Donuts was announced, another venture with Glendale, Calif.-based IHOP was unveiled. As part of its partnership with IHOP Quaker has agreed to create a proprietary blend of oatmeal — the first jointly developed breakfast item between the two brands.
IHOP will add a choice of oatmeal varieties made with Quaker Oats, including super fruit and nut oatmeal, super fruit oatmeal, and banana and brown sugar oatmeal to their menu.

“We are excited about our new association with The Quaker Oats Co.,” said Natalia Franco, senior vice-president of marketing at IHOP. “By bringing together two beloved food brands, we have created an exciting product that is full of flavor and nutrition. IHOP has something to satisfy every taste and diet, and we are committed to continually introducing new, delicious low-calorie and smart options to the menu.”
Kristina Mangelsdorf, chief marketing officer of PepsiCo Food Service, added, “Partnering with IHOP, a brand that gets as excited about breakfast as we do, is a natural fit for Quaker. For more than 130 years Quaker has been nourishing healthy families with delicious, whole grain foods and we’re excited to continue to innovate and expand the ways in which we serve oatmeal lovers.”

Super fruit oatmeal with almonds and walnuts features Quaker Oats, cinnamon sugar, almonds, walnuts and a blend of five dried fruits, including blueberries, cherries, cranberries, raisins and golden raisins.
Banana and brown sugar oatmeal combines Quaker Oats with banana slices, brown sugar and milk.
The growth and potential of the Quaker brand was addressed by Brian Cornell, chief executive officer of PepsiCo Americas Foods, in a Sept. 5 conference call with analysts as part of the Barclays Back to School Conference.

“The Quaker brand is really a hallmark in America today,” Mr. Cornell said. “It is a brand that has a tremendous history. It is rooted in health and wellness, and today is the largest and, importantly, most trusted health and wellness brand in America.”

He said Quaker is once again growing share in the hot cereal category, and is off to a strong start in 2012. Focus for the brand has shifted toward brand building and innovation, he said.

“Our Real Medleys product has propelled our hot cereal category,” Mr. Cornell said. “It is driving share, it is bringing in new consumers, and we have really only just started to turn up the excitement around this great new product. We have also recently been recognized by dietitians across the country for this great, new healthy innovation.

“Our bar business is also responding to innovation and our chewy yogurt bars are being well received by our consumers and retail customers. We are bringing those together by folding and activating the brand as one master brand, taking opportunities like this one here today to combine our Quaker portfolio of hot, of ready-to-eat, and bars to provide students a great way to start their day and continue to snack on great healthy products throughout the day.”

Mr. Cornell concluded by saying Quaker is “going to continue to build on the terrific health and wellness credentials that Quaker offers. We are going to look to elevate the master brands, continue to support this brand with great innovation and international expansion opportunities.”

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